Zigup (LSE:ZIG) — Fireside chat relating to the business and its Full Year Results

0:00 Good afternoon, and welcome to the ZIGUP PLC Full Year Results Investor Presentation. Throughout this recorded meeting, investors will be in listen only mode. Questions are encouraged and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. Before we begin, I would like to submit the following poll. And I would now like to hand you over to Ross Hawley, Head of Investor Relations. Good afternoon to you. Thank you very much. Good afternoon, everybody, and welcome to another of ZIGUP's post results fireside chats. Today, we're in the investor meet studio in London, which is where we recorded our full year results video, which we published last week. And I do hope that actually everybody has a chance to watch that video, which we put onto our website.

0:46 It's got a number of new features, if I can put it that way. We had some b roll and some films in there about our facilities and also an interview with one of our larger rental customers in The UK. As I said, this is structured as an sort of informal fireside chat where I look to raise a number of the topics which investors have had when we've been going around, on roadshow, which has happened last week, and then also we've got a full week this week as well. And I'll try and blend in any questions which people are asking. If you see me peering around the place, that's usual, but it's really me going to be looking at the q and a, so do please put any there and we'll endeavor to answer those at the appropriate points in the discussion. So I think with that, let's start off. Martin, should we start? Maybe you'd like to give an overview of our performance for the year, maybe using just a couple of the slides at the start of the full year deck. Okay Ross, you said informal but this is formal as well. This is the most formal part of the year. Absolutely.

1:43 Welcome everybody. Thank you for tuning in. Just first of all, standing back looking at this year's delivery. I mean, it's a strong set of results. We've delivered on an operational basis and a financial basis. You know, we've seen on an underlying basis, we've seen revenue up over 5% and also we've grown our fleet now to nearly 140,000 vehicles, so that's phenomenal growth. Underlying results in terms of EBIT up nearly 10%. So again, when you strip back the disposal revenue, disposal profits, the underlying growth is very strong, something we called out the last time we spoke. You know, this year, Spain has been a standout performer for us. You know, we know the markets are growing strong there. We've got a very commanded position in terms of what we do. So seeing the metrics there with over 16% revenue growth, it's a clear, as I say, standout performer.

2:36 We've also had good momentum, you know, to The UK and I business as well. We'll come on to talk about our simplification program, because that's delivering benefits in a number of fronts. But we're seeing that momentum now in the business as well, so we're seeing growth coming through The UK and I in the way that we planned previously. And very importantly, you know, investors have talked to us about cash. Rachel will give some more detail on that shortly. But our steady state cash now up to nearly $97.96 97,000,000. So, clearly, that's better than I think the market had expected. So we're very pleased to be reporting on that basis. And we're on track to deliver, you know, I guess, all the things that we talked about, not only at the half year, the full year, but we're on track to deliver that and some more. So very good set of results, very pleased with sort of what's been delivered, and the clarity around what's been delivered as well. We're very clear about what we're executing. Right. And before we kind of move on to the next slide, almost, it's sort of what we said we were doing on the tin, isn't it, that kind of phrase? It may not be the most exciting. I mean, there's some great results there, but it is what people have been looking for, Muth, what we've said we would do. It is.

3:46 I feel like, are we boring? Because we do what's on the tin and a little bit more I would say. I would say and a little bit more. You know, every time we touch the market, you know, we've made progress. We've made strong progress. So there's nothing wrong with delivering, saying, delivering, saying, delivering. I think that's very, very key. So I think, you know, for investors that have followed the story, been with us for a while, they'll see from the management team that's what we're about. You know, we try and tell it as clear as it is, people understand the investment proposition, understand what the business is doing, and then deliver on that and some. In IR terms, I'm going call that exciting and reassuring. I think that's the I'll take that. Yeah. Great. Maybe if we come on to the the next slide, just about what's been achieved in 2026.

4:32 And really, it's a really good platform, isn't it? There's been some great progress across the business. Do you want to just pick out a few thoughts? Yeah. Pick I won't sort of cover all the slide, people can see the material. I mean, the fleet growth I've called out, you know, we've seen that fleet, as I say, nearly 140,000 vehicles. So as we're investing in the fleet and replacing the fleet, you know, that's the other good thing is that we've brought the fleet now to where we want it to be age wise. It's a modern fleet. So that sort of inflection, if you like, of our replacement cycle in the fleet has now sort of moved on. So, you know, size is important because that scale gives us benefits in the market in terms of how we're operating. We've also built our capacity in terms of, you know, we've broadened our footprint in terms of what we can do. You know, in Spain was a good example, I talked about that, but, you know, we've opened up delivery hubs in Spain, so that's freed capacity from our branch network to be able to do more of what we do. So we're smart about how do we create that additional capacity without increasing operational leverage too much. So we're actually getting some good wins in terms of the customers from the markets that we're facing into, and we're able to support that by growing our footprint both in Spain and The UK and I.

5:48 We also talk about customer service. It's important, you know. There's no lip service here. You know, these results from Trustpilot and our NPS and the customer stats feedback, you know, are very, very strong. Any investor wants to go on to Northgate Mobility now on Trustpilot, they'll see a 4.9 rating of thousands of reviews, rated as excellent. And that's because we do put the customer at the heart of what we do. So we don't force it, this comes naturally into the business, but getting it right for the customer and that customer service feedback is very very important for us. So I think, you know, across all the things that we're doing, we're making very strong progress delivering all the points that we've touched on previously. Yeah. I think our customer service really matters. I'm quite close to my local branch.

6:35 When I go in there, they actually have a board there with all of their Trustpilot scores. And they really just come down to naming the people on the front desk or the guys who've helped them out and how much that really matters for our customers. Yeah. I mean, we're not we're not a faceless organization, you know. We are entrusted by a lot of our partners to be that face of their organization when there's touch points at the branches, when we're handing over vehicles and dealing with lots of people. You know, so it's important that we get it right. And our people want to get it right. That's the key thing. They want to get it right. Yes, they are motivated to do that. And as you say, that feedback is continuous. If something goes wrong and inevitably it will, you've got to put it right very quickly. As I say, if you get it right for the customer, you'll get it right for the rest of the organization. Absolutely.

7:20 Just before I come to to Rachel, just fleet investment. I think it's one of the things which we talked about on this slide, like capacity growth. So there's over the past few years, there's been the issue about the replacement cycle, etcetera. And now we're starting to see clearly Spain growth over the past couple of years. The UK and I also coming back into that growth side. That that must be very exciting and also real underpinning the business. Yeah. Absolutely. I mean, look, we know that sort of post the pandemic, there was a supply shortage. We've talked about that a lot. But as we've gone through the period now, supply is completely normalized. So we can get hold of vehicles in Spain, UK, and Ireland. No problem at all. And as I said, we've gone to that point of inflection where we've replaced the fleet now to a point that we're comfortable with.

8:05 And as you say, growth on top of that. We had 130,000,000 of growth capital that we invested in the period that we're reporting. Nearly 90,000,000 of that went into Spain, because that market is growing quicker. But across the board, have seen growth. You know, last year in The UK and I, we did consolidate that. You know, we said it wasn't all about sort of headline numbers of VOH, was about sort of profitability, strong margins, strong returns. So we've done the work that we wanted to do to shape that. We're in the markets and the sectors that we want to be invested in, and we're working with customers who are in growth mode. And what we've seen and what we'll see coming through is that reflected now in the sort of the go forward position. So yes, the eager eyed people who sort of saw the closing VOH will see for The UK and I that that's gone up as well as in Spain.

8:56 But it is positioning us very well for that further progress. Fantastic. So, doing what we said we would do on the TIN. Great platform. Do you want to just put this year FY '26 in the financial context? We've probably got a couple of slides, you want to use them, but just give us some thoughts. So I think the, you know, the slides demonstrate what what Martin's shared both in terms of, you know, we've got revenue growth, we've got profit excluding disposals that have been growing 9.7%, And then you can see what's happening in terms of the net book value of our fleet and and that investment, not just in terms of growing the fleet, but the replacing our fleet assets. So you can actually see that how that's gone up by significant amount year on year, all whilst we're keeping within our leverage guidance of one to two times.

9:48 The one thing I would call out also on this slide is what we disclosed around dividend. So continuing our sustainable progressive dividend. So we've increased the dividend by 2.3% to 27p. You know, as Martha said, that continuous doing what we said and continuing to progress, I think, is reflected in the financials. Yeah. Fantastic. And then just in terms of you've come in to something where there's this business model which is working well, isn't it? And that debt and that leverage dynamic, we understand how to use that. It makes a business work. Do you want to just give a little bit of color around some of that as well? Yeah. So as I said, we've guided to one to two times. We're keen to stay within guidance range.

10:39 We do have headroom within that guidance range. So we certainly have a very supportive banking group, and we've got facilities that are beyond that that level. And our average rate is is three point three percent. We don't have any urgent need for for refinancing. So our first tranche of refinancing is is not until the next full financial year. That's a smaller piece, and and actually our average maturities are out to to 2030. So we've got a really good set of financing arrangements at a at a good rate, to support the investments that that we're wanting to make in in the fleet to drive growth going forward. Perfect. I'll come back to things like the sales and cash, I think, a little later, but just maybe bouncing back again. Shall we just sort of run through some of the markets, some of the the growth prospects? So let's go back to Spain.

11:37 Clearly, delivery this year. There's more to come? Yes, there's more to come, Ross. So, you know, this year, I mean, we pulled out a couple of examples this year. You know, ADIF, the national Spanish rail operator, you know, we've delivered, you know, more than 800 vehicles into that contract. They started only in February this year, so it's yet to mature through the book. But that's a sort of an important, if you like, customer in in the municipal win, if you like, to to have, it demonstrates our capability, it demonstrates our scale and our national presence. So being able to support a customer like Adif, you know, was a standout for us in Spain. And I talked about the, you know, the hub network, just to be clear in terms of what I'm talking about here.

12:24 You know, across all of our branches, you know, 26 branches across Spain, you know, customers, new vehicles are delivered to those branches, customers come and collect them, there's a lot of activity. And equally, we're doing all our daily stuff as well. What we've done is we've pulled that sort of aspect of new vehicle delivery out into centralized hubs. So in Madrid, for example, we've got a huge footprint where we have our new vehicles delivered. And now this last year alone, I think it was 19,000 vehicles. In Spain? Yeah, in Spain alone that we did a delivery and collection format on. So that frees up capacity to continue to grow. So yes, we're making the space to grow. We're seeing the market being, you know, ripe to continue to grow in terms of flexible rental.

13:13 So all the elements are strong for us. You know, the two drivers, one being the market itself, second one being the economy. The economy is a smaller part of the driver, because, you know, the economy doesn't sort of you know, it's not the key element of why we are growing. It is because the market itself, the flexible rental, is growing and we're well positioned to service that. Yes. And I think, you know, when I hear those statistics like 19,000 vehicles, you then go per month, that is 1,500 vehicles. And so actually, the scale of turning through and that is us replacing older vehicles and putting new ones onto the fleet, that's now a very slick operation there. They always think about that operational efficiency, don't they, within the business? Yeah. Absolutely. I mean, the management team have done a great job in in Spain. As you say, they're looking at that operational leverage all the time. They're looking for ways of creating that capacity.

14:06 We know we're gonna grow. As I said, we've put our sort of investments into that growth, and, you know, we we expect that to continue. Yeah. So really fruits of strong efficiency there, top market position, really nice secular growth, etcetera. And as you say, the economy is still doing well, but that's really just a supporting Indeed. Factor to it. And and then in in The UK and I, when we're sitting here not here, but when we're sitting talking about those, we were talking about eight large customers, significant orders in The UK. And that was reflecting how The UK was actually starting to really focus on the core elements and growth there. That that's come through really, hasn't it? It has. I mean, our proposition is about being integrated, having a platform of mobility or services that are integrated.

14:53 You know, so our strength is in owning what we do, being able to deliver on that. And where we see to great effect that come to life is when a customer, an existing customer takes more product off that platform, and we join up the services. So effectively, they're not having to engage with multiple companies providing services in a silo. So the more that we can do where it's joined up, because the way that we view life is is that if you're providing a service that is interlinked, why not have the same provider that provides that service? It takes away, frictional costs. It adds efficiency to what you're doing. Commercially, it's better and just a better outcome for the customer, the end user. So those things are coming to fruition. And we are, you know, we're gaining, you know, some market share as well. So, you know, another standout for me was the National Highways contract.

15:46 It felt like a new contract win. They've been a customer of ours for a long time. So, you know, ten year plus on a government procured scheme, you know, well competed for. So our ability to retain and extend that now for another ten years is an excellent outcome for us. And it demonstrates our capability, you know, from our sort of secure contact center up in the North, through deploying all the sort of roadside recovery and the network of operators that we work with that provide that fantastic service for us and for National Highways. You know, and that also leads into other things that we can do, where that scale and that capability attracts other customers and partners to our platform. Yes. And so this is probably the last time we're going to use the words claims and services because as we move through, etcetera, that those words are kind of that the statement on that division. But absolutely, as you say, the national highways which can tap into all the gantries and do the core recovery, statutory recovery, police force on the back of that, it's actually having the infrastructure on which we can then grow a range of services from that.

16:52 Indeed. Yes. From that. I I think, you know, we can talk a lot about all all the great things. We also have to make difficult decisions as well, don't we? And about businesses which may not have actually delivered all. In truth, the market has changed a little bit. I'm just Yes. Touch on that. Yeah. So I think you're referring to the two businesses, so New Law and ChargeDB. So you're right. I mean, the board took a very disciplined decision around sort of what we should do with the business. Think we called out New Law last year and said it wasn't core to what we do. You know, great set of people that sort of operate in that business, but it's dealing with personal injury claims, you know, medical claims, and we've moved away from that as our sort of it's not part of our core purpose. So, you know, the view was that we're gonna run that off over a series of years, but in truth, I think being able to achieve that and give great service to the clients at the end of that, we decided we needed to accelerate our position and put that into a good place, you know, working with a third party to achieve that. So, drawn the line under our activities in that space and took the charge this year and that's sort of, you know, out of our system, so to speak. ChargeDB, yeah, some investors have said, okay, that's an interesting one. ChargeDB, where we're installing charging points for customers.

18:10 You know, we work with some big customers on the third party basis as well as supporting our own internal requirements. But, as you said, one reason or another, you know, we acquired that business, it's a small amount of money, I don't think we pushed it at the time, but it's, you know, under £1,000,000. Yes. But we made that a national operation, because we needed national scale, we needed fitters, installers, and to be able to do that on a national basis. But with all the sort of the changes in terms of attitudes towards taking EV, not taking EV, dates and times, everything sort of changed or moved around, We couldn't get to an optimal level of of service there and it's it's you know, it was dragging on results in terms of margins, in terms of absolute profitability.

18:57 You know, on the day of the results, Rachel called out. You know, when we stand back from those two businesses now, there's an add back of 7,000,000 of value from FY twenty eight onwards. So it's bringing that discipline to say, you know, what are we gonna stop doing that's not adding value to the equation. And I think that's a perfect sort of I was asking you about that in part because it leads into about the simplification and actually decision making and what the business has done and how you've led that to think about how to actually take The UK and I businesses on a bit. We announced it at the interims and said, watch this space. Mhmm. And I think the space has actually really achieved a lot. Do want to just talk maybe in the first instance about simplifying of the brands and the customer journey? And then, Rachel, I'll probably come to you to think about some of the financial side top of that. Yeah. So look, how we face off to the market is important to us. You know, since the the main merger in 2020, as I said, we did six acquisitions.

19:52 You know, so we brought six different brands, additional brands into the equation. And that's all well and good, you know, but when you're talking to the market about the products and services that you have, we want to be joined up. So whilst we've absorbed the experience and the knowledge of all the brands that we operate with, we've now simply put that into two divisions. So in The UK and I, we now operate under two brands. So you've got Northgate Mobility and FMG. So we've simplified how we face off into the market and make it easier for customers to interact back. We have one account manager that can go in and have a conversation about the products and services that we offer, as opposed to having lots of account managers go in and do that. And that simplification has added clarity about what we can do and how we can do it. Feedback from customers are at early stages, but the feedback is very positive.

20:42 And we can see where customers do take multiple products across the different brands, but it's all joined up. And it's also good for our colleagues. This makes it simple for them to be able to say: You know what? I can sell these products and services, I can see how it all works, and I can sell the vision, this is a simplified sort of process. Yes, and it comes with benefits. It wasn't the primary driver for doing the simplification, it comes with financial benefits. But, you know, that's over and above what the primary driver for the simplification is. Great. And I'm gonna do a quick shout out for the videos which are coming out with our annual report, but we're starting to use them within our social media as well. So we've done one on the national highways, but also one on how the the as was Blakedale, but has moved through to our highways, and how that simplification has really helped them drive their business. So I hope people enjoy looking at those when they come out, but I think really sort of highlights that. Matt h, thank you. We have a question. Very grateful. You continue to win major contracts such as highways, TESCO insurance, etcetera.

21:47 What do you think differentiates ZIGUP from competitors when bidding for these long term contracts? Yeah, it's a good question. It's the integrated proposition of being able to join up those services and just make it easy for a customer to go through that journey. You know, and that adds value to the equation. So when you're not working with multiple brands, multiple handoffs, multiple services, but you can deliver best in class and join that up, you're creating value because you're removing some of the frictional costs, you're removing some of the delay by bringing it all together. And that's a stand that's a standout position in terms of being able to offer that into the market, and and fairly unique. Other businesses can put these pieces of the jigsaw together and use third parties to supply it all.

22:34 But when you're doing that and you're controlling that delivery of that service as well, it gets back to us with the feedback that we get in terms of customer satisfaction. As I said, it also brings commerciality to the table. So that gives us some leverage as well. Brilliant. I'm going to let you take a break or whatever my eye turns to Rachel. Some of the key themes which investors have asked us to cover. Let's stick with the simplification, the slide which I think people have got. We've got some interesting cost saving figures. We've talked a bit about what we thought we would be able to achieve. Don't just say where we are and confidence going forward. Yeah. Thanks, Ross. So we shared at the interims a a view around where we thought the cost savings would be in terms of, 10,000,000 savings for for this financial year, coming and then into 20,000,000 for f y '28. Annualized going forward. And that would be annualized going forward, and that's very much the focus around what Martin shared around how we're thinking about these savings, that they are sustainable savings. We are doing things to ensure that we achieve those savings going forward.

23:42 So we've we've done a lot of work. We've got much more confidence now in those numbers, and so have been able to reconfirm those. You know, they are it's an ambitious plan, but we are well on the way to achieving that. I think one of the things that Martin said this week last week was about where we are in the supplier savings, and over a third of of those savings are are now in the bag. Of course, we will we're we want to do better. We'll always look to to over deliver where we can, but we're focused right now on on delivering that number in the 20,000,000. And I think, you know, when we talked about this together, you sort of emphasized to me it's a it's it's having conversations at a slightly higher level. We've done the simplification, and now there is that strategic partner relationship, which we do with our own customers.

24:33 Clearly, we're doing that ourselves as well, and those benefits will come through. Yeah. And and, of course, you know, having that conversation once in the way that Martin talked about how we're trying to talk to our customers once, really wanting to talk to our suppliers once as one entity, and making sure that then we get the benefits of our scale in those conversations, and that they get the benefits of having a bigger share of the pie. But we can also make sure that we're influencing their roadmaps and their processes that best suit us. And we've got a pipeline of conversations ongoing, but we're really pleased with how that's progressing. Yeah, it's fantastic. And then a natural consequence has been resegmentation. The analysts actually were quite pleased that it was a relatively simple thing. We're still working through with them. But that resegmentation simplifies things down, requires a little bit of change to medium term guidance, but I think that's all bedding in. You want to just talk about that? Never easy changing reporting segments, but we've tried to to aid that transition as much as we can. There's some information on our investor website, Ross, thank you very much for helping to to deliver that to show how how people should be thinking about old to to new. As we as we've given our go forward guidance, we've given that in the new segment. So obviously, UKNI as a whole doesn't change. It's how we are talking about the two pieces and we've done our best to try and help to teach in in terms of how people should think

26:03 about old to new. Within that guidance, there's a bit of an incremental lift to Spain where we're seeing it's still doing well, and and then some real positives in The UK as well, isn't there? Yeah. So I I mean, I think our medium term, guidance, there's lots to be positive about. We we've, you know, we've we've said people should expect revenue growth, so mid single digit. They should expect EBIT margin growth. So both in Northgate Mobility and FMG, the margin ranges that we we set out for medium term are above where they are today. Yeah. And with Spain, we improved the the margin guidance there as we're seeing margin coming through, and the basis of operational efficiencies that the teams are running, and some of the things that we talked about, about how they're thinking about delivering on their service to customers.

26:55 We've delivered a higher margin range than we had previously. And we're saying that we are confident around the 200,000,000 in FY twenty eight on steady state cash. Right. Let's talk cash on that. I said I've got a whole load of themes here on the financial side. This is one which actually investors really do care about. We indicated a couple of years ago, you've come in, you said, let's just see how it goes at at the interims. But now, Ash, I think you're we're sounding very positive on this. Yeah. I think we've seen a really clear inflection point, in the year. That's a very clear signal about how steady state cash has evolved. That's partly due to net replacement CapEx in that cycle that we had talked about, but also the EBITDA growth coming through.

27:44 And, you know, that's given us the confidence now around 200,000,000 for FY '28. Again, those two factors will play a part Yeah. As we move through through to that, probably more on EBITDA as we move forward than on net replacement CapEx. But, absolutely, we see now a clear path and clear line of sight to the 200,000,000. And and steady state cash as concept matters to help people understand something quite simple. It's not trying to show cash flow. It's not trying to show other things. We're not trying to do anything other than kind of going in simple terms. In simple terms, it's it's the cash that the business generates after replacing the fleet at the same level. It's not trying to do anything more difficult than Holding the fleet flat. Holding the fleet flat, and the cash that then it generates that enables us to invest further in fleet growth and the 130,000,000 that Martin talked about to drive then growth in the fleet after that point in time.

28:45 Yeah. And and with fleet growth, just because you did have a Roke slide and people do ask about Roke, when you're in a growth state, Roke does impact because of the nature of it. That's right. So, you know, we're we're buying assets at a point in time, but we're getting returns for those assets over a period of of years, and particularly in growth and accelerated growth, which is where we were in FY '26. If you think about where we are with the fleet that Martin talked about and particularly with Spain, then we will see that will have a short term impact on on Roke, but we we're looking at the returns on those assets over the period that we actually own those assets. So we're very focused on return on investment at the point that we're buying those assets. Yeah.

29:32 Okay. Very clear, and it makes a lot of sense. Martin, still slightly financial, but actually about the quality of earnings. Underlying growth in terms of what we've thought about for next year, we've indicated on that. And and the quality of earnings, it's disposal profits are coming down. And in many ways, you've said many times actually, that's a good thing because it's taking away some of the noise. But actually, this year, the offset is growth within the underlying business. Indeed, yes. I mean, investors picked up, you know, the sort of mix of profits over the sort of last two years as disposal profits had a sort of a bigger bigger impact in terms of the overall results. Nothing we can do about that. We we had assets that were of higher value and when we came to dispose of them, you know, we appreciated the the value return from that. But you're right, it's you know, that's why we point to the underlying performance of the business, the underlying EBIT performance, because that's a true measure of the operating parts of the business in terms of what they're driving in terms of that progress, you know, and double digit growth is very strong.

30:34 Disposal profits will be what they are, you know, it's our job to get depreciation right, so that when we come to sell the asset, it's supposed to be zero. Zero loss, zero profit, but as you know, there's always some change. Yeah. It's the way it works. So so but there that element of our financials is moderating, and it will sort of go we expect it to go in the direction of being sort of a non conversation. Yes. But you're right, the quality of the underlying earnings is what is important. And, you know, and then talking about those earnings, you know, those are on a lot of those earnings are on long term contracts. It's repeatable, you know, when we sign up whether it's a new insurer or a new partner, you know, it's a three and five year contract. National Highways, as I said, was ten years, you know. But they're long term, sustainable, quality earnings. It's not just a flexible daily rental or something like that. This is a point that we like to make sure that our investors understand this element.

31:36 You know, when we do our budgets, when we do our forecasts, you know, a lot of what we we can put in is is very sustainable because of the length of contracts and because of the of the things that we do over a long time. Yeah. I'm I'm gonna pause for just one moment and do the the usual, is do please ask questions. Matt has asked another one, which I will come to in a moment. I was gonna spend the last ten minutes talking about some of this, the sort of the theme about why we win, but please do send some questions through, and and we'll carry on with that. But in our results and actually in the annual report this year, this the thing about why we win is something when we've looked at what investors it was quite interesting. People say, companies don't talk about this quite so much as they might do. And and, actually, when we've all talked about customer service, etcetera, lots of companies talk about that. But it was so interesting having investors and analysts come around on a site visit and the feedback which you got and we got from that. I was saying, actually, I'm gonna just hear and say, what was their takeaways which you, know I think that they could have written your script, Ross, because it was, I mean, genuinely, seeing the feedback from analysts, shareholders, and other investors.

32:49 You know, they said when they came out on-site, and they actually interacted with our people, and they saw the scale of what we do, and then got into the detail around everything that involves, and then multiplied that by all the things that we do on a national and international basis, they suddenly realized the quality and the scale of this business. And as you say, that right to win, when you're doing all the services I've talked about, that we've discussed, know, when you're doing that in the real world, it's meaningful. And that's important, as I said, because I think the old world, it was very fragmented, very disjointed, lots of opportunity for things to fall over when multiple companies are involved. And I think that's the bit that we see as being very important to our delivery, and likewise, we get that feedback from customers. But yes, to bring it to life, to go out on-site, to see these things in action, to see all the things that we do and how we do it, I think people realize, actually, I think you call it the economic moat, but people realize actually there's a high barrier to entry to be able to replicate what we do.

33:59 Yes, and so when we think about ATIF, they were taking it from '24, 25 of our Spanish branches they couldn't have done it with anybody else with that kind of a service. If we just go to the customer slide, on on the video, we had one of our larger UK rental companies actually have a video. It's another one, Jamie. Talking there about why actually coming to us. So that customer service, we sort of started off with that. I'm not necessarily gonna finish, but it it it does matter and it's part of the DNA, doesn't it? So the right to win comes from actually delivering. Yeah. Absolutely. I mean, strangely enough, was with the owner of that business that we that we case studied Right. On Friday, and, you know, this business has grown exponentially, you know, through acquisition.

34:44 The fleet size is over 2,000 vehicles, and, you know, Peter was able to talk to me first hand about why it's important to get that fleet right and what we're doing and how that's supporting their position in the market. You know, this presentation of their vehicles, the consistency of that approach, you know, they're winning national contracts on a sort of a landscape basis to do all the housing developments and so on So and so it's important to them that they present as a joined up unified business, even though they've done a number of acquisitions. And the flexibility that we can offer them by being able to bring fleet on rapidly and support sort of that scaled up growth, but equally, you know, if there's times when it's quieter, that you have that flexibility on the rental program to bring fleet on and off. But that's a great story of how a business has put its capital to work, to develop its business Yes. And leaving the OpEx with companies like ourselves to provide the mobility to keep them working twenty four seven. Yeah.

35:41 And so, Matt, thank you for your other question, which is how much opportunity do you see the Northgate Mobility brand create for cross selling? Well, actually, that company is a good example because of our arborealist vehicles and other stuff there. Just that cross sell side? Yeah, look, different parts of the model that cross sell well, you know, but if you strip it down in terms of activities, you know, vehicles need to be recovered from the roadside following an accident. Vehicles need to be serviced, maintenance and repaired. You need replacement vehicles. You need to have contact center capability to deal with things. You need fleet management and accident management assistance. So across the platform, you know, we're providing these services and we are consolidating our own footprint. So we get scale economies from our contact center, from our branches and from our specialist capabilities.

36:31 You know, probably a better example is to talk about, you know, the business that was known as Blakedale. Now that's Northgate Highways. You know, Blakedale was a family owned business based up in Lancashire in Chorley. Single site operation, trying to service as many as many of their customers as they could from that site. We've now scaled that across across more of the Northgate mobility branches. So therefore, they can touch customers in the South, East, West, Midlands, and provide that service a little bit more effortlessly. That will create opportunities, cross sell opportunities, not only for Northgate itself and its own brand, but also for Northgate Highways. So those are examples where you're using that scale, that consolidated scale to provide services, you know, as I say, in a joined up way. Yes, and the interesting thing exactly with this was was how when you talk to the guys in the in the business, they say, do know that the strength of relationship which Blakedale had and which they've carried on, actually has meant that a number of big names, which you would have thought would be natural customers of the other parts of Northgate, but for whatever reasons haven't really. Suddenly, going, these are guys we trust, we know these, and that single account manager, that relationship can then actually travel across. So it's really it's both ways, isn't it? Yeah. Absolutely.

37:45 And to Matt's question about sort of Northgate Mobility, you know, we talk about our insurance replacement vehicles. You know, they are sighted with the Northgate Mobility fleet. So it's all it's one fleet that we present in The UK and I. So our ability to deliver to customers, you know, we think about it, you know, as a lot of doorstep delivery that we do. So therefore you've got maybe two cars out, two drivers out doing lots of things, but the proximity of our branch network to support that means we can do it much more efficiently. You know, pre merger that was sort of a little bit more fragmented and in its worst case I talk about having two drivers take two cars two hours to deliver a car. Now we're sort of touching customers if you take away the Outer Hebrides etc. Yeah, we're touching customers a lot more frequently in quicker time And that sort of adds efficiencies back into what we can deliver, and we can share that with our partners. Fantastic.

38:41 So it's a broader question which I'm going to ask you is about capital allocation on that. And I know both of you have answered this, so I'm going to kind of throw it into the middle and whichever one. But it's just sort of the the thinking about that capital allocation over the medium term, how how that works, and what the potential for as that as we go through that 200,000,000, how you feel about that. I don't know who we are. So one of the things that we talked about last week is as we start to see that 200,000,000 coming through in line with our medium term guidance is that I said that alongside that, we should see leverage reduce. However, it gives us optionality now to apply our capital allocation priorities and to think about where are the opportunities to deliver additional value for our shareholders over and above what we've set out for medium term guidance. And our our priorities are the same as as they've been in terms of thinking about the organic investment, the dividend, m and a, and then, you know, returning sort of share buybacks to our investors.

39:49 But now we'll be in a space where we can make some of those decisions at that point in time. What I've tried to guide people towards is that if you think about the guidance that we've set out, that leverage should reduce and then we'll decide what we can do in terms of optionality to see at that point in time. Martin, do you have anything to add? No, think Rachel's set out where we are. I mean, our priority is to invest in our business. If you look at our cost of our debt, average cost of debt is 3.3%. You know, it's a great place to be, and we're getting returns, you know, obviously well above that. So, we should be investing capital to support that growth. But of course, as the sort of cash evolves and builds, that does give us that optionality. And of course, the board is always sort of mindful we've got the policy, very clear on that, and Rachel set that out, But it does give us optionality in terms of what we do. Yeah. Fantastic.

40:44 I've got one more theme to talk about. I'm also conscious of time as well. So but thank you both Matt and Eric. Hopefully, we've actually answered the questions which you put through. I think we did. Technology transformation. No no company should go through something without mentioning AI, but but, actually, we have a real reason for talking about that at the moment, don't we? Rachel, do want to just talk a bit about the Microsoft collaboration and and where the potential is? Yeah. Sure. So a couple of things I I would call out is that we have been deploying a new platform into our contact centers that has AI with within that and functionality that has been making a difference to our customers and to our employees in terms of how they how they can be productive, but also how it can help to smooth the journey for for our customers. And so we're continuing that that journey of deploying different parts of technology into that space.

41:45 But we also announced a collaboration and being a frontier firm with Microsoft around Copilot, so deploying over 3,000 licenses across the group. That is not us just saying we're deploying licenses and everybody see what you can do with it. We have a really clear program looking at specific use cases about how we drive, again, process efficiency, but also value for for our customers in terms of how we think about using those licenses. And that is being done in conjunction with Microsoft and a joint partner so that we can make sure that as we move through the next few months, as we're really now into the deployment and execution space, we can drive value from that.

42:33 I'm also I've heard you be at pains to kind of go, surfing within the insurance journey of a claim. There's times where technology shouldn't play a part or rather voice and having somebody talking to you really absolutely matters and will never move away from that. No, you're right. It's important. I mean, we see that that's a core capability that's of great value. You know, I talk about the instances where you might be at the side of the road, you've had an accident, hopefully nobody's injured, but you're in a state of distress. And yes, you might have contacted your insurance company, but you need to speak to somebody. You need to be able to you don't want to speak to a chatbot that's going to take you around in a bit of a circle. You speak to somebody with that empathy that's required, but reassurance that things are going to be put back right.

43:22 And practical things, you know. So I think that sort of voice connection absolutely helps deliver the service, and that's why we get such good feedback as well from customers. Not everything's at the side of the road. You know, there are things that come into the contact center that are post the first notification, if you like, and then a bit more administrative. And that's where technology absolutely can benefit you because you can self administer elements of that. But, you know, the front end of needing to speak to somebody when something's happened that's not part of your daily occurrence that you weren't expecting, didn't want it to happen, but now, you know, you need that support. And as I say, we've got that capability as one of our core strengths. Yeah. And I think it's a fascinating business whereby in some parts, whether it's in the body shop or workshop, technology matters, but actually so does experience in the apprenticeship program to actually teach people real human skills and technical skills.

44:16 It will take a long time before those ever get supplanted even with slightly more complex vehicles. Yes, and I might be misquoting somebody. Don't know if it was Larry think of Blackrock or Is it Blackrock or Bladstone? Yeah. But talked about and I heard a podcast where he talked about sort of, you know, don't send your son or daughters to the university to get sort of legal degrees and everything else. Think about electricians, think about plumbing. It is very much that. I mean, we won the King's award for our sort of people innovation in terms of promoting opportunity. We have over 520 apprentices in the group. You know, these are people that are paired off with trained mentors to give them a formal program of apprenticeship. And, you know, that's worked wonders because a lot of those skills that have come through our body shops and the industry more generally over many decades, that was starting to get lost. So by bringing in the apprenticeships and running the program that we do, it's been fantastic, you know, seeing people on-site, getting trained, formal qualifications, and then getting a job at the end of it. That's the key thing. And I was going to say when I spoke to the king, but I'm not going to I'm going to I'm going Can you get that part out of this? Yeah.

45:31 But, you know, that was the key thing about how do you retain those people afterwards when you train them. And over 90% of our apprentices stay within the group, so they're actually applying their skills and getting paid a decent wage for doing that. Yes, and we took around some other people being shareholders and analysts and we gave them a go to have a go at plastic welding and some of the things on a site visit. It's not easy to do, and actually there's a real skill to that, and certainly to do that consistently at the kind of productivity levels as well. Yeah, I mean, it's not sort of talking technology for technology's sake, but it demonstrates actually that when you're running a scaled body shop facility, you know, you need to deploy the latest techniques. We've all been on-site, we've all had a little go at these things and I don't think everything's falling apart that I did.

46:18 But you need to have the latest techniques. It plays to, you know, how efficiently you are repairing vehicles, how it affects your ESG, your credentials in terms of being able to repair rather than replace, And also getting good outcomes, you know, commercially as well in terms of doing the right thing. So quality is at the essence of what we do, and using the latest techniques from the accredited, you know, organizations that we link into to make sure that we are up to date with that and putting all the modern technology into our body shops and our workshops to support our technicians do that job. And that's very credible when you come on-site and you see that in action and I think that's the feedback we were getting when we did that. Totally. Well, look, I'm I'm I would just say again, economic moat clearly and the productivity and product productive growth from that actually comes.

47:07 But I sort of feel we're there. We've done all the questions. I I found a really interesting conversation on that. So thank you very much, Martin. Thank you, Rachel. I hope everybody found that interesting. Always welcome to foreign some questions offline, etcetera. But I think with that, I'm gonna hand back to the investor meet team to close the call. Thank you. That's great. Martin, Rachel, Ross, thank you for updating investors today. Could you please ask investors not to close this session as you now will be automatically redirected to provide your feedback, which will help the company better understand its views and expectations. On behalf of the management team, we would like to thank you for attending today's presentation, and good afternoon to you all. All.